"The biggest sale ever," read the huge signs plastered all over the shop windows at Woolworths yesterday. Sadly, there will be an even bigger sale today.

At 4.30pm yesterday, the managers of the chain's 815 outlets received an email from head office telling them that a buyer had not been found for the great icon of the British high street which went into administration on 26 November with £385m of debt. From today, it told them, they were to launch a closing-down sale.

"Low everyday prices" had just got even lower. Inside the Woolies branch in Chorlton-cum-Hardy, south Manchester, shortly after the news came through, a pimply youth in a red sports shirt – Woolworth's uniform – began sweeping red boxes from one of the shelves with a cavalier movement of the arm. Customers looked up. The word had spread. Perhaps he was taking it out on the stock.

But no, he was merely clearing the empty boxes from which the 2009 Woolworths diaries had sold out. The future is clearly high on a lot of people's agendas in Manchester's trendiest suburb.

"Sorry to hear your news," said a woman bringing a £12 heavy cotton-lined wicker linen basket to the till. "The staff were just told 10 minutes ago that all hope is gone," said the young man at the till, with heavy melodrama, demonstrating a sense of irony you might not have anticipated from a shop assistant at Woolies

Like the rest of the 25,000 staff he had been told by the firm's administrator, Deloitte, that if no offers for Woolworths were forthcoming, it was "possible that some stores may close before the end of December". So closure was not yet entirely definite but the closing down sale was.

At the next till, an overweight man was struggling with a vacuum cleaner in a big box. "Can I bring it back, if it's not the right one?" he asked the young woman at the cash register.

"Certainly, sir, if you keep the receipt," she replied, though she was probably mentally adding the caveat: "but you'll have to be bloody quick, mate".

Some of the customers looked as shocked as the staff. "I've come here for the past 20 years," said Joanna Jones, a 63-year-old in a bobble hat. "I buy bits and pieces – things like tights and kitchenware and birthday cards. I like it because it's cheaper than other places but there's a good choice and it's a good price."

Bits and pieces is part of Woolworths' problem, according to the retail analysts. To the shopper, it sells DVDs, stationery, toys, bathroom fittings, towel rails, glasses, pans, children's clothes, electrical goods and DIY. To an analyst, that looks like a terrible lack of focus in a world of increasing specialisms.

All around the store are shops with a more singular sense of purpose – a Belgian beer and chocolate shop, specialist stationery or – and here's a rarity –an independent bookshop. Pick 'n' mix is out of fashion.

Its customers are loyal. "I've been coming here 25 years," says Joan Fletcher. "The staff are so lovely. I put the Lottery on or buy a tin of paint. I've come in the car, so I could have gone somewhere else but I've always used Woolies. You just pop in." But not often enough, it seems. Justin Marks, 38, has come for a present for a child. "I like it here because they have a decent range.

"I come for birthdays and Christmas, once or twice a year. I usually shop at the Trafford centre."

Casual sales are not enough. And there is a limit to the number of sound-activated self-switching-on electrical plugs the average family needs at £19.99 a throw.

Sentiment is not enough to sustain a retail model, though there is plenty of that about. "I feel gutted," says Mary Scott, a masseuse in her forties. "It's one of the worst bits of news of the year. The Government is paying out billions for the banks; why can't it keep Woolies open? It's a great shop. I've been using Woolies since I was a kid. It's a real shame to see it go. I'd have used it more. if I'd known it was under threat." Which is not what the staff, now packing up for the night, want to hear. "I want to support local shops. I know it's a big chain but it feels like a big corner shop."

But corner shops stay open late. It is 5.30pm and the manager is bringing in the sandwich board from the roadside as his staff bring the shutters down. "It's shut," says a besuited accountant, Henry Fergus, to his twin brother, equally pinstriped. They have walked from their office to get a late birthday card and what Austin Fergus describes as "a DIY item".

"I suppose I'll go to Qualitysave," says Razwanna Ullah, dragging a bewildered small boy behind her. "It's the end of an era – like C&A," she adds.

In the toy section, the Woolworth Superstore Set has been reduced from £49.99 to just £19.99. For that, you get an electronic cash register, a conveyor belt and a supermarket trolley. It also comes with a sign saying: "Woolworths sale – half price". And from today you could pick up the entire shop for that.